Weekend trading (2024)

FAQs

Is weekend trading legit? ›

Trading over the weekend is possible in a limited sense, but it comes with its own set of complexities and potential risks.

Trading over the weekend is a big dilemma. On the one hand, you may suffer big losses, if the market is shocked by the unexpected news that you couldn't take into consideration before weekends. On the other hand, you may close trading before the weekend and lose an opportunity to have a profitable trade.

While FX is a 24-hour market, this doesn't extend to weekends. As you may know by now, this is because institutional forex traders and large banks (the main buyers and sellers of foreign exchange) only operate during working hours in the week like many other service providers.

Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour.

The weekend gap trading strategy has gained traction among forex traders eager to capitalize on these price discrepancies. The primary premise of this strategy is the market's propensity to attempt to fill the gap, meaning that the price will endeavor to return to the Friday closing point.

Weekend trading gives you access to indices, cryptocurrency and forex markets on a Saturday and Sunday. So, if news breaks and you see an opportunity to trade, you won't have to wait until markets open on Monday to trade. Weekend prices for indices and forex are quoted separately to their weekday counterparts.

The middle of the week typically shows the most movement, as the pip range widens for most of the major currency pairs. Saturdays and Sundays tend to be the least favourable days for trading forex. Most traders tend to avoid trading forex during holidays and around major news events.

Now you know that Monday and Friday are bad days for trading and the latter is worse than the former. If you exclude Monday and Friday from your trading you will discover that the best trading setups emerge between Tuesday and Thursday.

The opening period (9:30 a.m. to 10:30 a.m. Eastern Time) is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.

The best time of day to buy and sell shares is usually thought to be the first couple of hours of the market opening. The reason for this is that all significant market news for the day is factored into the stock price first thing in the morning.

Do stocks go up on weekends? ›

The volatility of stock returns over weekends is much smaller than could be predicted from intraweek volatility. In short, holding stocks over weekends gives low and perhaps negative returns, but also provides relatively low risk.

Mondays: A Day of Adjustment

Historically, Mondays have often been considered a good day to buy stocks, primarily due to the 'Weekend Effect' or 'Monday Effect'. This theory suggests that stock prices tend to drop on Mondays due to negative news released over the weekend.

Rule 1: Always Use a Trading Plan

You need a trading plan because it can assist you with making coherent trading decisions and define the boundaries of your optimal trade. A decent trading plan will assist you with avoiding making passionate decisions without giving it much thought.

You can do a quick analysis, adjust your trading strategy and get into a good position well after the crowd pulls the trigger on a gap play. Here is how. Let the index/stock trade for the first fifteen minutes and then use the high and low of this “fifteen minute range” as support and resistance levels.

It is not a hard and fast rule, but rather a guideline that has been observed by many traders over the years. The logic behind this rule is that if the market has not reversed by 11 am EST, it is less likely to experience a significant trend reversal during the remainder of the trading day.

What is weekend trading? Weekend trading gives you access to forex and indices markets on a Saturday and Sunday. So, if news breaks and you see an opportunity to trade, you won't have to wait until the markets open again on Sunday evening.

Day trading is a high-risk, high-reward strategy. If your decisions don't work out, you can lose money much more quickly than a regular investor, especially if you use leverage. A study of 1,600 day traders over the course of two years found that 97% of individuals who day traded for more than 300 days lost money.

Day traders close their positions daily, so they won't have any weekend trades. Although, if you ever have day trades on when New York closes (any day during the week) you'll definitely want to read this article as well. During the week the forex market doesn't close.